Home Depot to acquire HD Supply for $56 per share, total enterprise value of $8B

The Home Depot (HD) announced it has entered into a definitive agreement to acquire HD Supply Holdings (HDS), a national distributor of maintenance, repair and operations products in the multifamily and hospitality end markets.

Under the terms of the merger agreement, a subsidiary of The Home Depot will commence a cash tender offer to purchase all outstanding shares of HD Supply common stock for $56 per share, for a total enterprise value of approximately $8 billion. The closing of the tender offer is subject to customary closing conditions, including regulatory approvals and the tender of a majority of the shares of HD Supply common stock then outstanding and is expected to be completed during The Home Depot’s fiscal fourth quarter, which ends on January 31, 2021.
The transaction is expected to be funded through cash on hand and debt. “We plan to access the debt capital markets to raise incremental indebtedness in support of this acquisition. We also expect the transaction to be accretive to earnings in fiscal 2021, with potential for significant shareholder value creation over the longer term,” said Richard McPhail, executive vice president and CFO.

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